Saturday, January 10, 2009

Western prosperity is based on resources that are running out

SIR — In response to the lack of a flagship achievement by economics, as noted by Jean-Philippe Bouchaud in his Essay ‘Economics needs a scientific revolution’ (Nature 455, 1181; 2008), Jesper Stage proposes in Correspondence that the prosperity of western societies is one such achievement (‘Speaking up for economic sciences modelling’ Nature 456, 570; 2008). However, this prosperity is mainly based on the use of non-renewable resources and therefore is probably spurious.

Several hundred million years were needed to form the fossil energy that will be exhausted during a few hundred years. This is roughly equivalent to spending all one’s annual income during the first 30 seconds of a year. In particular, the frenzy to automate processes in order to increase competitiveness leads to rapid exhaustion of available resources, for example through over-fishing or degradation of soils.

All current growth-based economic models imply massive use of non-renewable resources and environmental degradation. These models are not sustainable, even in the short term. As early as 160 years ago, John Stuart Mill affirmed that “the richest and most prosperous countries would very soon attain the stationary state” (Principles of Political Economy Longmans, 1848). In contrast to that time, when resources were being used up at a rate that was several orders of magnitude slower than today, a phase of economic degrowth is necessary before a stationary state can be reached. It would be a major achievement of economics to achieve such a degrowth without social and political disasters.